Film industry: extend Alaska production tax credit

ANCHORAGE — Mike Devlin and his partners are building a multi-million dollar film production complex in Alaska — risk money, he says, unless state lawmakers extend an incentive program that’s credited with luring a growing number of TV and film producers to the far north.

If the state’s tax credit program goes away, so will the complex being developed in Anchorage by Devlin’s company, Evergreen Films, for 3D productions, which would be a first in Alaska. The highly technical equipment already in place would be shipped to Los Angeles and other places with incentives programs.

“If we don’t have the tax credit, we can’t afford to make our movies here,” Devlin said.

The $100 million program approved in 2009 is set to expire in 2013. It would be extended 10 years and another $200 million under a bill sponsored by state Sen. Johnny Ellis, an Anchorage Democrat who believes Alaska could gain from the curtailment of similar programs in other states. The Alaska Senate passed his bill last year, but it stalled in the House, which is expected to revisit the issue during the legislative session that just started.

“We’ve had a gold rush of opportunity in film and television productions,” Ellis said. “That’s very exciting in this five-year experiment.”

State Rep. Anna Fairclough voted against creation of the program in the first place out of concerns that productions the state helped pay for could put Alaska in a bad light. She still has concerns but said she is open to taking another look at the current bill, which calls for some changes including a requirement that the program be audited. The bill is in the House Finance Committee, of which the Eagle River Republican is vice-chair.

“We need to lift up the hood and make sure the program is benefiting the people of Alaska,” Fairclough said. “How do we create responsibly and not have winners and losers?”

To date, the program has approved a total of about $14.3 million in tax credits for almost three dozen productions — including 16 reality projects and 10 feature films — that spent a total of nearly $45 million in the state since the program began running in late 2009. Altogether, 83 applications to the Alaska Film Office have prequalified, said Wanetta Ayers, director of the state Division of Economic Development.

A major production starring Nicolas Cage, “The Frozen Ground,” recently wrapped up filming in Alaska. Another major production starring Drew Barrymore, “Big Miracle,” and a supernatural thriller starring Jon Voight filmed in Alaska in 2010, boosting the number of movies that were actually shot in the state instead of other places dressed up as Alaska.

Reality projects tapping the incentive include “Deadliest Catch,” ‘’Ice Road Truckers,” Flying Wild Alaska” and a special eight-part series that concluded last year, “Sarah Palin’s Alaska,” which featured the former Alaska governor and 2008 Republican vice presidential nominee, and her family. The Palin show, which aired on TLC, was approved for a tax credit of nearly $1.2 million after the production spent about $3.6 million in the state.

Supporters say the economy and Alaska residents are beneficiaries of the program, which provides incentives including a 30 percent tax credit to qualifying productions spending at least $100,000 in the state. The program uses a broker system, where studios or producers sell — or broker — their tax credits to companies that have a tax liability in the state.

Added incentives for Alaska hires, as well as rural and offseason, raise credits to a maximum of 44 percent.

“It’s a job creator,” said film production services veteran Bob Crockett, president of the Alaska Film Group, a nonprofit trade organization. Crockett said extending the program would go a long way to encouraging investors to fill a vacuum in the state’s film industry: infrastructure such as sound stages and enclosed sets. “There’s no reason to invest millions of dollars if this program isn’t going anywhere.”

Crockett also would like to see a state incentive for infrastructure investment. To fill another lack, Alaska lawmakers approved $486,000 to train Alaskans to work on film crews, he said.

Crockett is general manager of Piksik, a new film production services company launched by NANA Development Corp., the business arm of NANA Regional Corp., an Alaska Native corporation. NANA also is partnering with Devlin’s film company to develop the Anchorage production complex.

“The thing that really drives NANA and its thought processes is the fact that this is something new to Alaska that creates opportunity,” said Piksik president Robin Kornfield. “With the tax credit, the incentive to come here to produce films is critical because as we know, there are lots of other places in the world that producers can choose.”